0% interest on purchases, what's the card with the highest limit?

huntersc

Hi all

I'm shortly buying a car and want to pay for it on a credit card. The car will be £23k so I'd need as high a credit limit as possible. Before anyone tells me I'm an idiot here's the idea:

I have the £23k for the car already.
Rather than hand it to the car dealership I'll pay for the car on a 0% interest card.
In the meantime, for the year of 0% interest I'll keep the money in a savings account, probably Kaupthing and earn +6% interest.
Once the interest free period ends I'll simply pay off the card.

So I'm looking for a card provider that's offering the highest credit limit. In terms of my personal circumstances I already have a couple of cards with that kind of limit (paid off in full each month) but obviously they don't offer 0% of purchases.

So which cards should I be looking at? Capital one seem to offer a nice 0% period but I wonder what kind of limit they offer?

Cheers

normanmark

You'd need to be a very good earner to find a credit limit as big as that i'd say.

huntersc

I do okay, I've never had issues with large limits before it's just that I need a new card for this purpose specifically. It's killing spending this much on a car but we need it and it's a good deal so every little thing I can do to reduce the price makes me feel a little better about it all. So I need to know who's offering good limits at the moment. £15k would do but £20k+ would be better obviously.

BaileyB

If you have not applied for a card in the last few months you could try 2 cards and split the amount then.

Also you may wanna check as some people charge extra for a CC.

epsilondraconis

You may also want to confirm that the dealership won't be charging you extra for paying for all / part of the car on your credit card.

Edit: If only I'd read MrKennedy's post properly before tapping away.

exel1966

I'd be amazed to find any dealer willing to sell a car without adding the credit card fee onto the sale so in this case you'll be looking at an extra minimum of £403 and possibly as high as £690 added to the bill which makes stoozing via this method pretty unworthwile, that is assuming you'll find a new card company willing to give you such a high limit as a new customer. In reality It probably won't happen !

Having a couple of cards with that kind of limit already will only hinder your chances of getting another card with such a high limit especially if you're percentage of used credit is high in relation to your available credit. Having a high limit on one or more cards guarantess you absolutely nothing.

Without doubt MBNA,Egg and Virgin are some of the better cards for higher limits.

huntersc

Ah, i never thought of the fact that they'd want to add a CC charge. Darn. I need to knock off an extra £1k to make myself feel a bit better Can't get it from the dealer, he's already dropped a lot below the Parker's price. Hmmm.

NickX

Yep MBNA including the Virgin range of cards tend to offer the higher limits.

With these cards you could transfer the funds direct to your Bank Account (Super Balance Transfer), then you could pay the dealer from there. There will be a fee of around 3% for this Balance Transfer but you will get 0% for 15 months.

The longest 0% purchase deal is with Capital One and is until November 2009, so you could use this to purchase the car directly provided they give you a high enough limit. Yes, I think the dealer will want to add a surcharge for paying by credit card. If they don't then I suspect you haven't beaten them down to their best price in the negotiation stage.

However, provided the dealer surcharge is around 3% aswell, there is not going to be that much in it. You should still make a profit by keeping the funds in a high interest savings account earning 6.5%.

Personally I would apply for around 3 cards to ensure I got enough credit and split the purchase across the 3 cards. You could for instance pay for part of the car on a Capital One purchase card and pay part cash after Super Balance Transferring the funds from a MBNA card.

Coincidently I have bought a car a few years ago this way for £35k. I still have the car, I still have the funds earning interest, and yes I still have the credit card debt at 0%.

The only thing that hurts is that the car is now worth about £25k, but I hey, I love it. Hope you get your dream machine :beer:

huntersc

Thanks for that. the problem is I'm not sure I can be bothered with all the hassle to get a 0.5% (more likely 0.3%) rate on £20k. That's a lot of work for not much return over a 15 month period

NickX

huntersc wrote: »

Thanks for that. the problem is I'm not sure I can be bothered with all the hassle to get a 0.5% (more likely 0.3%) rate on £20k. That's a lot of work for not much return over a 15 month period

Hmm not sure I agree.

If you keep the savings in a 6.5% savings account and pay a fee of 3% for the 15 month deal, your net rate of interest is 4.1%.

Assume you have to pay 20% tax on this, and you earn 3.28% net.

On £23k, you make around £750.

Pays for short holiday :beer: